The Ethical Supply Chain depends on CSR (Corporate Social Responsibility) practices in the supply chain. CSR in an ethical supply chain considers dimensions like philanthropy, community, workplace diversity, safety, human rights and environment. The ethical supply chain involves producers, suppliers, focal companies, customers and logistic providers. [1][2] .
Companies use ethical supply chains as a method of branding, competitive positioning and marketing. [3] It is a popular approach to manage social and environmental dimensions through the ethical supply chain for companies, e.g. food producers [4] and environmental effects [5] . Many companies doesn't understand the importance of doing good. Having a working ethical supply chain gives the company great advantages towards their competitors as well as saving the world. This phenomenon is well explained in the video below.
Even though ethical supply chains are a part of today’s world, the measurements and standards are not precisely defined jet. We can’t follow-up in which extent companies or organizations are practicing CSR in their supply chains. [6]
Connection to food
Food is something everyone and everybody needs to be able to live. It's the most important thing after water for human beings. Resources in our world are decreasing at the moment. Therefore, there is a great need for an ethical and sustainable supply chain. Ethical supply chain aims for a better world where the resources that are used in the ethical supply chain are sustainable. Companies that works in the food industry has a great responsibly to build up and maintain these ethical supply chains. [7]
The food industry in the world is in a difficult situation. It is in the risk zone of public criticism, if they have issue concerning CSR in their supply chain. In global food industry the ethical supply chain concerns issues like animal welfare, biotechnology, environment, fair trade, health and safety. [8]
The 10: Reduced Inequalities goal strives to get people out of poverty. It should always consist of the following three dimensions; economic, social and environment. The ethical supply chain can contribute by doing ethical choices and by treating people in the supply chain equally.
The 13: Climate Action goal aims to urgently tackle climate change and its impacts. Climate change concerns everybody and is affecting lives communities and countries. In every companies or organizations activity there is a supply chain and therefore everyone can contribute to make the world a better place. This concerns aspects as food waste and ethical consumerism.
Critics
The ethical supply chain, in theory, sounds like a great concept. Even though the video tells the advantages of an ethical supply chain, there are concerns and critics about the concept. Do ethical supply chains increase profits? Can companies ensure that their supply chain is ethical, and how? Are the voluntary standards, certifications and regulations doing enough? Well, it requires a committed and hard working supply chain to make it ethical, not forgetting the economic contribution[9]. Legislation and regulation at the moment are not at the level that they are supposed to be. To mark your ethical supply chain as ethical you have to fulfill some voluntary requirements. Here is the first problem, voluntary in the corporate world makes things complicated. When the legislation and regulation isn't precise companies aren't required to report about their CSR actions. That makes it harder to follow-up and it gives to much space to companies. The second problem is that different authorities are responsible for different parts of the environment, e.g. federal, state and local. This makes the decision making process more complex and harder to manage. The biggest contributions to legislation and regulation are the ISO standards and OECD guidelines. [10]
Corporate praxis
The corporate and organizations are well aware of their impact to the environment. Especially in the food industry, companies involved are under great pressure of public criticism for their CSR actions. It can affect their market shares and profitability; therefore they put a lot of effort into CSR issues in marketing and branding their CSR efforts. [11]
A good example of CSR practices in a supply chain is HOK-Elanto. Their CSR-programme consist of the environment, wellbeing of staff, responsible products and services aspects. Their CSR actions in the environment section consists of delivering with full trucks, optimizing routes and follow-up on emissions and environmental effects on their vehicles on an yearly basis. The wellbeing of the staff consists of motivating your staff, giving them education and have the opportunity to do different things inside the corporation. Responsible products and services are HOK-Elanto's core business, that is why they put a lot of effort in it. All their products consists of proper labeling, which tells your where the products are produced. A significant part of HOK-Elanto's foods are local, either from the region Uusimaa or Finland and their fish is caught from sustainable stocks. Because HOK-Elanto does business in Finland they are supervised by the food safety agency Evira.[12]
Examples from Finland
Finland is well known for its cold winters and mobile phones. We follow strictly rules and legislations that comes from the EU and our own government. This leads us to the ethical supply chain. It is not a well known expression in Finland, but I think that we are connected to it more than we know. We have a free will in Finland, which gives us the possibility to choose what we want and participate with our consuming behavior. Finland is a country that are very responsible and at the top of responsible actions which includes the ethical supply chain. There is always room for improvement, but we are on a good way.
The video below is an interview with Pro Ethical Trade Finland, which is a NGO in Finland that promotes responsible consumption, sustainable production and fair global trade.
Innovations
The ethical supply chain is a broad subject and consists of different dimensions. Innovations in this area should involve the whole ethical supply chain. Last year a non-profit organization called the Global Logistics Emission Council (GLEC) came up with a new universal method to measure the carbon footprint of a global logistic supply chain. This method promises standardize data that can be comparable with businesses around the world. It's possible with this method to consistently measure emissions for road, rail and sea transport. It will help logistic service providers to reduce their footprint and meet their customers needs in environmental questions. Big companies like HP, Intel and Deutsche Post DHL Group have promised to participate and adopt this method to their systems and supply chains. E.g. the Deutsche Post DHL Group´s goal is to reduce their carbon efficiency in their network by 30 % to 2020 and this tool is a big step for them towards that goal. The video below explains short what the Global Logistics Emission Council (GLEC) does. [13]
^ Maloni M. J. & M. E. Brown (2006). Corporate Social Responsibility in Supply Chain: An Application in the Food Industry. Journal of Business Ethics, 68 pp. 35-52
^ Manning L., Baines R.N. & Chadd S.A. (2006). Ethical modelling of the food supply chain. British Food Journal, Vol. 108, pp. 358-370.
^ Maloni M. J. & M. E. Brown (2006). Corporate Social Responsibility in Supply Chain: An Application in the Food Industry. Journal of Business Ethics, 68 pp. 35-52
^ Blowfied M. (2003). Ethical Supply Chains in the Cocoa, Coffee and Tea industries. Center for Corporate Citizenship, USA.
^ Beamon B. M. (2005). Environmental and sustainability ethics in supply chain management. Science and Engineering Ethics, 11 pp. 221-234.
^ Maloni M. J. & M. E. Brown (2006). Corporate Social Responsibility in Supply Chain: An Application in the Food Industry. Journal of Business Ethics, 68 pp. 35-52
^ Manning L., Baines R.N. & Chadd S.A. (2006). Ethical modelling of the food supply chain. British Food Journal, Vol. 108, pp. 358-370.
^ Maloni M. J. & M. E. Brown (2006). Corporate Social Responsibility in Supply Chain: An Application in the Food Industry. Journal of Business Ethics, 68 pp. 35-52
^ Harbert, T. (2016). Ethics and the supply chain. SAGE business researcher. Available: http://businessresearcher.sagepub.com/. doi: 10.1177/237455680209.n1
Ethical Supply Chain
Definition
The Ethical Supply Chain depends on CSR (Corporate Social Responsibility) practices in the supply chain. CSR in an ethical supply chain considers dimensions like philanthropy, community, workplace diversity, safety, human rights and environment. The ethical supply chain involves producers, suppliers, focal companies, customers and logistic providers. [1] [2] .
Companies use ethical supply chains as a method of branding, competitive positioning and marketing. [3] It is a popular approach to manage social and environmental dimensions through the ethical supply chain for companies, e.g. food producers [4] and environmental effects [5] . Many companies doesn't understand the importance of doing good. Having a working ethical supply chain gives the company great advantages towards their competitors as well as saving the world. This phenomenon is well explained in the video below.
Even though ethical supply chains are a part of today’s world, the measurements and standards are not precisely defined jet. We can’t follow-up in which extent companies or organizations are practicing CSR in their supply chains. [6]
Connection to food
Food is something everyone and everybody needs to be able to live. It's the most important thing after water for human beings. Resources in our world are decreasing at the moment. Therefore, there is a great need for an ethical and sustainable supply chain. Ethical supply chain aims for a better world where the resources that are used in the ethical supply chain are sustainable. Companies that works in the food industry has a great responsibly to build up and maintain these ethical supply chains. [7]
The food industry in the world is in a difficult situation. It is in the risk zone of public criticism, if they have issue concerning CSR in their supply chain. In global food industry the ethical supply chain concerns issues like animal welfare, biotechnology, environment, fair trade, health and safety. [8]
Connection to SDG’s
The ethical supply chain is one way of contributing to UN’s sustainable development goals. The ethical supply chain relates to most of these goals, but have bigger impact on goals such as 10: Reduced inequalities, 12: Responsible Consumption and Production and 13: Climate Action.
The 10: Reduced Inequalities goal strives to get people out of poverty. It should always consist of the following three dimensions; economic, social and environment. The ethical supply chain can contribute by doing ethical choices and by treating people in the supply chain equally.
The 12: Responsible Consumption and Production goal aim to ensure sustainable infrastructure, energy efficiency and providing basic services and jobs for everyone. The approach of a more Responsible Consumption and Production environment requires actions from all supply chain actors, from producer to final consumer.
The 13: Climate Action goal aims to urgently tackle climate change and its impacts. Climate change concerns everybody and is affecting lives communities and countries. In every companies or organizations activity there is a supply chain and therefore everyone can contribute to make the world a better place. This concerns aspects as food waste and ethical consumerism.
Critics
The ethical supply chain, in theory, sounds like a great concept. Even though the video tells the advantages of an ethical supply chain, there are concerns and critics about the concept. Do ethical supply chains increase profits? Can companies ensure that their supply chain is ethical, and how? Are the voluntary standards, certifications and regulations doing enough? Well, it requires a committed and hard working supply chain to make it ethical, not forgetting the economic contribution[9] . Legislation and regulation at the moment are not at the level that they are supposed to be. To mark your ethical supply chain as ethical you have to fulfill some voluntary requirements. Here is the first problem, voluntary in the corporate world makes things complicated. When the legislation and regulation isn't precise companies aren't required to report about their CSR actions. That makes it harder to follow-up and it gives to much space to companies. The second problem is that different authorities are responsible for different parts of the environment, e.g. federal, state and local. This makes the decision making process more complex and harder to manage. The biggest contributions to legislation and regulation are the ISO standards and OECD guidelines. [10]
Corporate praxis
The corporate and organizations are well aware of their impact to the environment. Especially in the food industry, companies involved are under great pressure of public criticism for their CSR actions. It can affect their market shares and profitability; therefore they put a lot of effort into CSR issues in marketing and branding their CSR efforts. [11]
A good example of CSR practices in a supply chain is HOK-Elanto. Their CSR-programme consist of the environment, wellbeing of staff, responsible products and services aspects. Their CSR actions in the environment section consists of delivering with full trucks, optimizing routes and follow-up on emissions and environmental effects on their vehicles on an yearly basis. The wellbeing of the staff consists of motivating your staff, giving them education and have the opportunity to do different things inside the corporation. Responsible products and services are HOK-Elanto's core business, that is why they put a lot of effort in it. All their products consists of proper labeling, which tells your where the products are produced. A significant part of HOK-Elanto's foods are local, either from the region Uusimaa or Finland and their fish is caught from sustainable stocks. Because HOK-Elanto does business in Finland they are supervised by the food safety agency Evira.[12]
Examples from Finland
Finland is well known for its cold winters and mobile phones. We follow strictly rules and legislations that comes from the EU and our own government. This leads us to the ethical supply chain. It is not a well known expression in Finland, but I think that we are connected to it more than we know. We have a free will in Finland, which gives us the possibility to choose what we want and participate with our consuming behavior. Finland is a country that are very responsible and at the top of responsible actions which includes the ethical supply chain. There is always room for improvement, but we are on a good way.
The video below is an interview with Pro Ethical Trade Finland, which is a NGO in Finland that promotes responsible consumption, sustainable production and fair global trade.
Innovations
The ethical supply chain is a broad subject and consists of different dimensions. Innovations in this area should involve the whole ethical supply chain. Last year a non-profit organization called the Global Logistics Emission Council (GLEC) came up with a new universal method to measure the carbon footprint of a global logistic supply chain. This method promises standardize data that can be comparable with businesses around the world. It's possible with this method to consistently measure emissions for road, rail and sea transport. It will help logistic service providers to reduce their footprint and meet their customers needs in environmental questions. Big companies like HP, Intel and Deutsche Post DHL Group have promised to participate and adopt this method to their systems and supply chains. E.g. the Deutsche Post DHL Group´s goal is to reduce their carbon efficiency in their network by 30 % to 2020 and this tool is a big step for them towards that goal. The video below explains short what the Global Logistics Emission Council (GLEC) does. [13]
Open sources
Schröder M.J.A. & McEachern M.G. (2004).Consumer value conflicts surrounding ethical food purchase decisions: a focus on animal welfare. International journal of Consumer Studies, Volume 28, Issue 2.
Simatupang T.M., Sridharan R., (2002). The Collaborative Supply Chain, The International Journal of Logistics Management, Vol. 13 Issue: 1, pp.15-30
Blowfield M. (2003). Ethical Supply Chains in the Cocoa, Coffee and Tea Industries, Greener Management International; Sheffield, pp. 15-24
External links
For more information visit these websites:Ethics and Supply Chains: http://businessresearcher.sagepub.com/sbr-1775-99621-2728048/20160425/ethics-and-the-supply-chain
Stockmann CSR: http://www.stockmanngroup.com/en/csr
Kesko CSR: http://www.kesko.fi/en/company/responsibility/
Quiz
Quiz created by Anders Genberg with GoConqr
Available: http://csr.unige.ch/wp-content/uploads/2013/10/FionaShadbolt-ClosingthegapbetweenCSRandRegulation.pdf